Pensions are Great ! Mmmmm, well they can be, but many find them confusing, boring, dangerous, tied up, expensive and so on. But pensions are money remember and they are not boring to those who are getting what they want out of them.
The big bonus is tax relief as most of this audience will be aware, but everyone is in a different situation, so to try and excite those people in some of those different situations, I have summarised a list of Top Pension Tips. Whether you need some basic guidance with your pension or whether you are wondering if you can get what you want out of your pension, you will hopefully find something in here to excite you about what at this moment, could be a boring pension dilemma.
If by chance you find anything exciting and wish to continue to get excited and happy about what you can do with your pension funds, then do please say hello.
Glyn Williams, Build Your Wealth
Tel: 07976 684123
In my last blog I spoke about the dilemma of how to reduce energy consumption in existing buildings. Many existing buildings are already quite old and built before energy efficiency became a consideration. I recently performed energy surveys of some old buildings – in fact, very old. Not only very old but were also Grade 1 Listed; part of our wonderful heritage. Hopefully these buildings will be around for many years to come and certainly beyond 2050; the target date for 80% reduction in CO2 emissions.
It is easy to jump to the conclusion that very old buildings exhibit poor energy performance. I fell prey to this presumption myself. I was therefore quite surprised to find that a large (3400m2) and lively community venue featuring an auditorium, dance studios, meetings rooms, bars, restaurant, and workshops etc, operating in a mishmash of, on average, Victorian industrial buildings, was actually achieving quite low consumption. This is achieved without any noticeable attempt at energy management or control. The energy consumption and corresponding carbon footprint are actually better than the norm expected for the nature of the activity and hence probably better than many, newer, buildings providing the same community services. This was even more surprising as some of the heating systems (yes, more than one throughout this rambling complex) could not be described as the most modern or energy efficient. Yet, the temperature was maintained at comfortable levels when I visited in February this year and last.
The other end of this energy performance spectrum, this time reinforcing my prejudice, was represented by a private school. The school comprised a collection of buildings, some quite new, but three others quite ancient. One of the three is a 14C hall with a high vaulted, church like space. The second is a 16C stables block long since converted for use as teaching and recreational space. And the third is a three storey, 17C large family town house style building now used as the main administration and domestic facilities of the school. The metering arrangements of the school only allow for a whole site analysis which reveals a consumption figure much higher than that expected for a boarding school. And as this is an average for a mixture of building ages it is probably safe to assume that the older buildings contribute to the poor performance for reasons I will go on to explain.
So why is the energy performance so different between the Victorian industrial buildings and the school? This question troubled me for a while but I believe I now know the answer. The Victorian industrial buildings are constructed in a heavy, massive way. Thick solid brick walls, much thicker than today’s typical 300mm, have a high thermal inertia. They also form a distinct thermal barrier between the outside and the inside. Thus the effect on the inside is cave-like remaining warm in winter and cool in summer. Large amounts of bare masonry also tend to act as slow response heat stores thus averaging out the diurnal temperature changes. Another factor is that pre and early Victorian industrial buildings tended to have very small windows; which is the case here. Windows, even modern well sealed double or triple glazed, are no competition to masonry in terms of thermal performance. They conduct heat through them at least 7 times more than masonry, act as a chill point for radiated heat (like having a negative radiator in the room), and if on any face but the north can admit sunlight and hence solar gain contributing to wild diurnal swings. On this last point it is interesting to note that the community venue operators in the Victorian building have had no need to install air conditioning or cooling facilities in the building. This is an unusual circumstance these days when many buildings need cooling to remove the heat generated by large areas of fenestration, physically active occupants and electrical office equipment.
In comparison to this two of the school’s ancient buildings are of lighter construction. The old stable block is a timber frame building with brick and wattle-and-daub infill and the town house, whilst solid brick at the first two storeys, has a top storey protruding into the roof space hence with reduced masonry envelopment. The diverse nature of occupation: offices, kitchen dining hall and dormitories; results in complex patterns of heating and ventilation requirements. The heating systems are quite old and I suspect they don’t have the capability to meet the complex usage patterns. When originally built this town house would have been heated by open coal fires and only when and where occupied. The occupants would have worn substantial clothing for most of the day (and night). On the point of age 20 years approaches the serviceable life for a heating system whilst a building is barely out of nappies at this age. Many buildings will see their way through ten or more heating systems through their lifetime.
Old buildings aren’t necessarily wasteful of energy and may have something to teach us yet about energy conservation. However, the exact requirements and the usage patterns should be well understood to ensure the right systems are installed. Great care should also be taken to avoid irreversible modification or damage. The energy systems will only be transient features in the building’s lifetime.
Climate change and reduction of greenhouse gas emissions is driving policies in a number of areas, one such being our buildings. The Energy Performance of Buildings Directive (EPBD) has shaped Building Regulations and property marketing for a few years now. The current Building Regulations introduced in 2010 require minimum thermal performance of new buildings. Specific guidelines are given for the thermal resistance of the envelopes (insulations of walls, floors ceilings etc), minimal air leakage and efficiency of heating, ventilation and cooling systems. The next upgrade of the Building Regs, probably due within the next couple of years, is likely to go even further and require that new buildings produce almost zero carbon dioxide.
Just a word about the definition of carbon dioxide emissions attributable to buildings. It obviously includes the CO2 from any on-site fuel burning activity such as gas or oil fired boilers but is also includes the CO2 emitted at the power stations when producing the electricity consumed at the building. Mains electricity produces over twice as much CO2 per unit of energy as natural gas. Electricity is also much more expensive per unit of energy than natural gas so it’s not usually a good idea to switch off your boiler and plug in lots of electric heaters.
The national target for 2050 is that carbon dioxide emissions should be reduced by 80% (from 2008 figures). That would be a credible target if all new buildings were shortly to achieve almost zero emissions. But herein lies the problem. The entire stock of UK buildings in 2050 is unlikely to have been built since the next release of the Building Regs. Buildings are incredibly durable. Many of those already built, probably 60% by some estimates, will still be around in 2050. And those will have been built to minimal or no thermal standards.
The climate change challenge is less about regulations for new buildings and more about what we do to improve the existing stock. This is where you will start to see the government concentrating their effort.
Their flagship initiative here is the ‘Green Deal’. This is a scheme that assists home owners (this year) and commercial building owners and users (this year or next) to improve the energy efficiency of their buildings by loans for improvement work paid back through the electricity bill. The scheme is based on a ‘Golden Rule’. This requires that the improvement will reduce energy costs sufficiently such that repayments do not increase the energy bill from the pre improvement figure. In other words: get your building improved at no extra running cost.
How the ‘Golden Rule’ is applied in practice will require a close technical assessment of the building in its current state and after the improvement. This test will be performed by an upgraded form of the Energy Performance Certificate (EPC); a document until now most of us only come across (and largely ignore) when buying or selling a house. There is currently much debate on how this EPC assessment is to be done and by whom. Matters such as independence, integrity and who pays are receiving much attention. I’ll let you know more when the dust settles.
Question: How, exactly, do I create my company’s strategy?
Answer: This is a question that drives right to the heart of a successful business or an unsuccessful business.
In my experience very few executives or business owners can honestly answer the question, “Can you summarise your company’s strategy in 45 words or less?” Those of my clients that can answer honestly are usually highly successful. To be effective the strategy has to be clear, simple and easily communicated.
A strategy statement has three basic elements – the objective, the scope and the advantage. It is vital to recognize the true essence of these three components. For example a strategic objective is NOT ‘To maximize shareholder wealth by exceeding customer expectations…’ This is no more than a platitude. It must be the single precise and specific objective that will drive the business over the next 5 years or so. A strategic objective is, for example, ‘To generate at least 15% growth per year in the value of the company for the next 3 years’ – specific, measurable and time-framed.
The second element – the scope – should not only describe exactly what should be done within defined boundaries, it should also specify where the firm or business should not go. For example it is clear that The Body Shop will never stock and sell cosmetics which have been developed through the laboratory testing of products on animals. Ryanair is another example – basically ‘no frills’ air travel. This approach shows how a self-imposed restriction can be of real strategic and competitive value.
Third – the advantage – is the most critical aspect of the strategy statement. This is expressed by stating the compelling reason why the customer should buy from you – essentially your customer value proposition. It also describes the unique activities that allow your company alone to deliver on that value proposition.
Clarity in all three elements is what most helps your team members understand how they can contribute to successful execution of your strategy. As a discipline you should restrict your strategy statement to 35 words
To show that I practice what I preach, this is my strategy statement:
To establish ten new mentoring engagements a year by offering trusted advice and guidance to Thames Valley-based business leaders and executives. They wish to realise their own potential, rather than depend on conventional consultants.
You will see that this contains the three key elements: 1) the objective; ‘ten new …. engagements a year…’, 2) the scope; ‘…Thames Valley-based business leaders …’ and 3) the advantage; ‘… They wish to realise their own potential, rather than…’
I have had many questions on the topic of company identity and strategy, and I will be dealing with them in the coming months.
In these days of hackers, malware and identity theft, how should you best secure yourself and your important data?
Craig Atkins, from 1-Fix Limited, will be presenting at our Hub meeting in Wokingham on Tuesday 20th March and will explain the best ways to safeguard your information, plus he’ll have lots of hints and tips on useful software packages for your PC and iPhone/iPad.
If you use a PC for your business, you won’t want to miss this!
Come along as our visitors – just let Richard Barker, hub manager for Wokingham, know by Monday that you plan to attend.
Contact him here: http://www.refer-on.com/contact/
At last I have got around to starting this blog. I would invite you to take a look at this video which explains what we do in very basic terms. Equally important is that Derwent of the Reading Hub put this together. So if it works in terms of getting a basic message across and you want one for your business, then do make contact with Derwent at www.drentsoft.com.
More blogs will follow. In the meantime if you have a more specific interest or know anyone who needs help with Pensions, Investment Management, Tax and insurance, do start at our website ; www.buildyourwealth.co.uk
Thank you for your interest.
Glyn Williams, Build Your Wealth
Tel: 07976 684123
Well, some of it is! You can invest and have a guarantee that the worst that can happen is your original amount of cash will be returned to you.
That acronym ISA is everywhere again. This blog is to remind you of the basics (not the detail) and to give pointers to 3 categories of investor:
• those who think ISA’s are “safe”.
• those who wish to save safely but are not happy with the current rates of cash deposit returns.
• those who know ISA’s might not be “safe”, who want to invest anyway but are wondering what to do.
Scarily, I have come across many people who have assumed that all ISA’s have some form of government protection, leading to them investing in more risky areas than they thought, such as equities. For all those first timers you need to know there are two types of ISA’s.
- Cash or deposit ISA’s – having some protection from the Government Deposit Protection Scheme
- Market linked or equity ISA’s which are risky and may result in you losing a little or a lot of your capital.
They may also give you a good profit but make sure you are clear about which type of ISA you are investing in
Very briefly, the maximum cash ISA allowance this year is £5,340 and £10,680 for an “investment” ISA – in other words in to the stock market.
There is plenty of information on the internet to help you find a cash ISA account but remember the basics and keep an eye on your investment. Many banks have a history of quietly reducing your “best rate” over time. Check also what ordinary non-ISA accounts will give you, especially if you are a zero rate tax payer, as non-ISA rates can sometimes be better for you.
If you are happy to tie your savings up for five years, have a think about the following concept.
Readers might be aware that under the Deposit Protection Scheme the first £85,000 you have invested with any one bank is protected by the government. The problem with cash ISA’s is the low return. So how about considering an “investment” with a bank, that is similarly protected by the Deposit Protection Scheme?
What’s the catch? The invested amount is tied up for 5 years and you may only receive back 100% of the cash you invested.
Why would you do this? Because, through the Deposit Protection Scheme, you are guaranteed the return of your monies and you might get a better return over the next five years.
Obviously no one knows what the future holds but examples of different investment managements past performance have looked like this
So the proposal from just one of the UK banks is either: we will give you your money back in five years OR you might benefit from these types of returns if the investment managers keep performing
By talking to your IFA (or perhaps give us a call) you should find alternative products to either cash or shares/equities (this is just one concept) that might take your interest. Just talk to your adviser.
The above sample investment concept is a lower risk investment to saving your funds directly into equities. Food for thought. If you wish to invest into equities and go for growth and immediate access of funds, unless you are your own researcher, I suggest you take independent financial advice from an IFA, such as us. You can find us at www.buildyourwealth.co.uk. From the free guides page you can sign up for our latest guide to investing with guarantees. Though published in June 2011 the principles still apply.
As ever, I remind you that these comments are designed to spark discussion – a bit like the daily papers – and do not constitute advice in any form. Please seek advice from an IFA and benefit from their experience, licensing and indemnity insurance protection, alongside those protection benefits of the Financial Services Compensation Scheme (FSCS).
For more information contact Glyn Williams at Build Your Wealth on 02380 457889